Treasury Official Highlights Top Concern in Book Minimum Tax Guidance

A Treasury official highlighted comments the department received about the “overlay” of the tax depreciation rules and accounting rules in the tax-and-climate law’s corporate alternative minimum tax.

The corporate alternative minimum tax, or CAMT, levies a 15% tax on companies with a three-year average financial statement income of over $1 billion. The Treasury and IRS released initial CAMT guidance in December, Notice 2023-7.

Tom West, deputy assistance secretary of tax policy at Treasury, explained Friday at the Federal Bar Association’s Tax Conference that the department felt that it had a “good steer” from Congress on the treatment of mergers and acquisitions and were able to issue the initial guidance. However, he lamented “no good deed goes unpunished.”

West noted commenters suggested there was an issue with “the overlay of the tax depreciation rules with the financial accounting rules.”

It’s a “spot where we’ve heard from a lot of people that maybe things need to be tweaked,” he continued.

The comments from the Treasury official come after it released guidance in February for insurers to provide clarity on the interplay between rules in the CAMT and financial accounting rules that could have adverse effects on the insurance industry.

West did not say that the December guidance would change as a result of these comments when the Treasury puts out its notice of proposed rulemaking. However, he said coming up with CAMT guidance was an “iterative process.”